Implementing Audit Procedures
Unit summary
This unit relates to the internal and external auditing process and requires you to be involved from the planning through to the reporting stage. You need to show that you can identify and assess control objectives, select a sample and tests, draw appropriate conclusions from the tests and draft the reports which give preliminary conclusions and recommendations. The unit requires you to be supervised in the work.
Unit details
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15 Business, Administration and Law
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15.1
Accounting and Finance
Assessment Methodology: Centrally set skills test of a minimum of 3 hours taken under high control conditions, OR, if NVQ, work-based evidence
You must have knowledge and understanding of: 1. A general understanding of the legal duties of auditors: the content of reports; the definition of proper records; 2. A general understanding of the liability of auditors under contract and negligence including liability to third parties; 3. Relevant legislation and auditing standards; 4. Types of audit: relationship between internal and external audit; 5. Recording and evaluating systems: conventional symbols; flowcharts; Internal Control Questionnaires (ICQs); checklists ; 6. Verification techniques: physical examination; re performance; third party confirmation; vouching; documentary evidence; identification of unusual items; 7. Basic sampling techniques in auditing: confidence levels; selection techniques (random numbers, interval sampling, stratified sampling; 8. The use of audit files and working papers; 9. Auditing techniques in an IT environment; 10. Types of tests: tests of control; substantive; 11. Management letters which include systems weaknesses, clerical/accounting mistakes, disagreement re accounting policies or treatment; 12. Principles of control: separation of functions; need for authorisation; recording custody; vouching; verification; 13. Materiality; 14. Audit risk; 15. Understanding that the accounting systems of an organisation are affected by its organisational structure, its administrative systems and procedures and the nature of its business transactions; 16. An understanding of the organisation's systems and knowledge of specific auditing procedures.
Simple Merge:
NOS: Based on AOSG Level 4 in Accounting Unit 17
Other: no text found
FSSC have formally supported this qualification (please see letter of support attached in the qualification need / support section).
| Learning Outcome |
Assessment Criteria |
| 1. Contribute to the planning of an audit assignment |
17.1.A Ascertain manual accounting systems under review and record them clearly on appropriate working papers
17.1.B Ascertain computerised accounting systems under review and record them clearly on appropriate working papers
17.1.C Ascertain purchases system under review and record clearly on appropriate
working papers
17.1.D Ascertain sales system under review and record clearly on appropriate working papers
17.1.E Ascertain stock system under review and record clearly on appropriate working papers
17.1.F Ascertain expenses system under review and record clearly on appropriate
working papers
17.1.G Ascertain balance sheet items under review and record them clearly on appropriate working papers
17.1.H Ascertain payroll system under review and record clearly on appropriate working papers
17.1.I Identify control objectives correctly
17.1.J Assess risks accurately
17.1.K Record significant weaknesses in control correctly
17.1.L Identify account balances to be verified and the associated risks
17.1.M Select an appropriate sample
17.1.N Select or devise appropriate tests of control in accordance with the organisation's procedures
17.1.O Select or devise appropriate substantive tests in accordance with the organisation's procedures
17.1.P Follow confidentiality and security procedures
17.1.Q Formulate the proposed audit plan clearly and in consultation with appropriate personnel |
| 2. Contribute to the planning of an audit assignment |
17.2.A Conduct test of control correctly and as specified in the audit plan, record test results properly and draw valid conclusions from them
17.2.B Conduct substantive test correctly and as specified in the audit plan, record test results properly and draw valid conclusions from them
17.2.C Establish the existence, completeness, ownership, valuation and description of assets and liabilities and gather appropriate evidence to support these findings
17.2.D Identify all matters of an unusual nature and refer them promptly to the audit supervisor
17.2.E Identify and record material and significant errors, deficiencies or other variations from standard and report them to the audit supervisor
17.2.F Examine the IT environment and asses it for security
17.2.G Conduct discussions with staff operating the system to be audited in a manner which promotes professional relationships between auditing and operational staff
17.2.H Follow confidentiality and security procedures |
| 3. Prepare related draft reports |
17.3.A Prepare clear and concise draft reports for a manual accounting system relating to the audit assignment and submit them for review and approval in line with organisational procedures
17.3.B Prepare clear and concise draft reports for a computerised accounting system relating to the audit assignment and submit them for review and approval in line with organisational procedures
17.3.C Draw valid conclusions and provide evidence to support them
17.3.D Make constructive and practicable recommendations
17.3.E Discuss and agree your preliminary conclusions and recommendations with the audit supervisor
17.3.F Follow confidentiality and security procedures |